2022 -- H 7798

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LC004983

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO TAXATION -- MOTION PICTURE PRODUCTION TAX CREDITS

     

     Introduced By: Representatives Craven, Caldwell, and Carson

     Date Introduced: March 03, 2022

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-31.2-5 of the General Laws in Chapter 44-31.2 entitled "Motion

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Picture Production Tax Credits" is hereby amended to read as follows:

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     44-31.2-5. Motion picture production company tax credit.

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     (a) A motion picture production company shall be allowed a credit to be computed as

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provided in this chapter against a tax imposed by chapters 11, 14, 17, and 30 of this title. The

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amount of the credit shall be thirty percent (30%) of the state-certified production costs incurred

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directly attributable to activity within the state, provided:

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     (1) That the primary locations are within the state of Rhode Island and the total production

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budget as defined herein is a minimum of one hundred thousand dollars ($100,000); or

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     (2) The motion picture production incurs and pays a minimum of ten million dollars

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($10,000,000) in state-certified production costs within a twelve-month (12) period.

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     The credit shall be earned in the taxable year in which production in Rhode Island is

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completed, as determined by the film office in final certification pursuant to § 44-31.2-6(c).

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     (b) For the purposes of this section: "total production budget" means and includes the

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motion picture production company's pre-production, production, and post-production costs

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incurred for the production activities of the motion picture production company in Rhode Island in

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connection with the production of a state-certified production. The budget shall not include costs

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associated with the promotion or marketing of the film, video, or television product.

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     (c) Notwithstanding subsection (a) of this section, the credit shall not exceed seven million

 

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dollars ($7,000,000) ten million dollars ($10,000,000) and shall be allowed against the tax for the

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taxable period in which the credit is earned and can be carried forward for not more than three (3)

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succeeding tax years. Pursuant to rules promulgated by the tax administrator, the administrator may

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issue a waiver of the seven million dollars ($7,000,000) ten million dollars ($10,000,000) tax credit

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cap for any feature-length film or television series up to the remaining funds available pursuant to

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section (e) of this section.

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     (d) Credits allowed to a motion picture production company, which is a subchapter S

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corporation, partnership, or a limited-liability company that is taxed as a partnership, shall be

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passed through respectively to persons designated as partners, members, or owners on a pro rata

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basis or pursuant to an executed agreement among such persons designated as subchapter S

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corporation shareholders, partners, or members documenting an alternate distribution method

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without regard to their sharing of other tax or economic attributes of such entity.

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     (e) No more than fifteen million dollars ($15,000,000) in total may be issued for any tax

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year beginning after December 31, 2007, for motion picture tax credits pursuant to this chapter

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and/or musical and theatrical production tax credits pursuant to chapter 31.3 of this title. After

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December 31, 2019, no more than twenty million dollars ($20,000,000) in total may be issued for

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any tax year for motion picture tax credits pursuant to this chapter and/or musical and theater

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production tax credits pursuant to chapter 31.3 of this title. Said credits shall be equally available

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to motion picture productions and musical and theatrical productions. No specific amount shall be

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set aside for either type of production.

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     (f) Exclusively for tax year 2022, the total amount of motion picture tax credits issued

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pursuant to this section and/or musical and theatrical production tax credits pursuant to chapter 31.3

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of this title shall not exceed thirty million dollars ($30,000,000).

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     (g) Beginning in tax year 2023, the total amount of motion picture tax credits issued

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pursuant to this section and/or musical and theatrical production tax credits pursuant to chapter 31.3

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of this title shall not exceed forty million dollars ($40,000,000).

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     SECTION 2. Section 44-31.2-11 of the General Laws in Chapter 44-31.2 entitled "Motion

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Picture Production Tax Credits" is hereby repealed.

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     44-31.2-11. Sunset.

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     No credits shall be issued on or after July 1, 2027, unless the production has received initial

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certification under § 44-31.2-6(a) prior to July 1, 2027.

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     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- MOTION PICTURE PRODUCTION TAX CREDITS

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     This act would increase the motion picture production company tax credit to ten million

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dollars ($10,000,000) and cap the available total of credits to forty million dollars ($40,000,000).

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This act would also eliminate the sunset provision.

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     This act would take effect upon passage.

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